USCA1 Opinion

October 7,1992

_________________________
No. 92-1344
FEDERAL DEPOSIT INSURANCE CORPORATION,
Plaintiff, Appellee,
v.
PRITAM SINGH, ET AL.,
Defendants, Appellants.
_________________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. Gene Carter, U.S. District Judge]
___________________
_________________________
Before
Selya and Stahl, Circuit Judges,
______________
and Skinner,* District Judge.
______________
_________________________
Elizabeth G. Stouder, with
____________________

whom John S. Whitman, Richardson

_______________ __________

& Troubh, Allen J. Hrycay, and Reef, Jordan, Hrycay & Sears were
_________ _______________
____________________________
on brief, for appellants.
Thomas A. Cox, with whom Mary Ann E. Rousseau and Friedman &
_____________
____________________
__________
Babcock were on brief, for appellee.
_______
_________________________

_________________________
_______________
*Of the District of Massachusetts, sitting by designation.

SELYA, Circuit Judge.

SELYA, Circuit Judge.
_____________
granted

summary judgment on a

In this case, the district court

guaranty in favor

Deposit Insurance Corporation

(FDIC).1

We affirm

because, as a

guaranty
summary
F.2d

the judgment below

The guarantors

appeal.

matter of law,

the

was free of ambiguity and the plaintiff was entitled to

enforcement.

46, 48-49

See, e.g., Garside v. Osco Drug, Inc., 895

___ ____ _______
_______________

(1st Cir.

grant of summary judgment

reflected in the record).
I.

of the Federal

BACKGROUND

1990) (appellate

court may

affirm a

on any independently sufficient ground

I.

BACKGROUND
On December

23,

1985, Bandon

Associates,

partnership, executed and delivered a promissory note

general

(the 1985

Note) in the principal amount of $1,050,000 to Patriot Bank, N.A.

As collateral, Bandon

gave the

held in

the 1985 Note

Maine.

Both

bank a mortgage

on property

and the mortgage

it

deed were

signed on Bandon's behalf by the four appellants as Bandon's sole

general

partners.

The

quartet also executed

and delivered, on

the same date, an

unconditional guaranty of Bandon's obligations

(the

By

Guaranty).

"jointly and severally

the terms

of

that document,

. . . unconditionally

the signers

guarantee[d]"

all

liabilities of Bandon Associates to Patriot Bank "now existing or

hereafter arising,

regardless

of

how they

arise

or

by

what

____________________

1By statute, cases in which the FDIC is a party are

ordinarily deemed to "arise under" the laws of the United States.
See 12 U.S.C.
1819(b)(2)(A) (Supp. II 1990).
Hence, the
___
district court possessed federal question jurisdiction pursuant
to 28 U.S.C.
1331 (1988).
In turn, we have appellate
jurisdiction under 28 U.S.C.
1291 (1988).
2

agreement

or instruments

they may be

evidenced .

. .

."

The

Guaranty did not refer specifically to the 1985 Note.

On
agreement
of

April

6,

1987,

Bandon

entered

(the Agreement) with Patriot

the 1985 loan.

same

face amount,

but provided

amortization schedule, and

written

substituting a new

The 1987

for a

Bank to revise the terms

The arrangement involved

note (the 1987 Note) for the old note.

into

Note was in the

fixed interest

a prepayment penalty.

It

rate, an

was signed

by the four appellants on Bandon's behalf and "individually."

also contained an assurance
its

[c]ollateral

for

that the Bank would "look

satisfaction

of

the

solely to

[o]bligations

Borrower or under any documents or undertaking given

It

of

as security

herefor and not to the personal assets of any partner, General or

Limited."

At the same time, Bandon and Patriot jointly executed

an emendatory instrument (the

Amendment) which tied the security

instruments into the 1987 Note, reaffirmed them, and stated that:
"The Mortgage,

the Assignment,

the Guaranty, and

the Financing

Statement . . . shall remain in full force and effect and all the
terms thereof

are hereby ratified and confirmed,

by the parties

hereto."

Although Bandon and

its principals were represented by

counsel,

the bank's

were the

lawyers

chief architects

of the

documents.
Soon thereafter,
England

(BNE).

On

Patriot Bank merged with

January 6,

1991,

Bank of New

the Comptroller

of

the

Currency determined that BNE was insolvent and appointed the FDIC
as receiver.

The New

Bank of New
3

England (NBNE) was

created,

chartered,

and duly designated as

a bridge bank.

The lender's

rights material to the Patriot/Bandon transactions were assigned,

in

relatively

rapid

succession,

from

Patriot

to

BNE

and,

eventually, to NBNE.
Meanwhile,
obligations
commenced
States

Bandon

under the

was

unable

1987 Note.

On

to

meet

its

February 13,

payment

1991, NBNE

a civil action to foreclose the mortgage in the United

District

simultaneously

Court
brought

individuals, alleging

for
an

the

District

action against

that each

of

of
the

them was

Maine.

It

appellants,

as

liable under

the

Guaranty for Bandon's default.

While the cases were pending, the

FDIC

receiver,

dissolved

NBNE and,

as

became the

substitute

plaintiff in both actions.2

In

time,

the

dispositive motion in the

Duhme doctrine, see
_____
___
460

district

court

granted

the

FDIC's

guaranty action, invoking the D'Oench,

________

D'Oench, Duhme & Co. v. FDIC,

____________________
____

315 U.S. 447,

(1942), and the statute that largely codifies the doctrine.3

____________________

2The district court thereafter granted the FDIC's motion for

summary judgment in the foreclosure action.
Bandon has not
appealed from that order. We need not dwell upon it.

3The statute provides in pertinent part:

No agreement which tends to diminish or
defeat the interest of the [FDIC] in any
asset acquired by it under this section or
section
1821 of this
title, either as
security for a loan . . . or as receiver of
any insured depository institution, shall be
valid
against
the
[FDIC] unless
such
agreement
(1) is in writing,
4

This

doctrine

defines

the

limited

agreements may validly diminish or

conditions

under

which

defeat the FDIC's interest in

an asset it acquires.
II.
II.

A THUMBNAIL SKETCH
A THUMBNAIL SKETCH
Appellants theorize that the non-recourse

the

1987

Note

conflicts

reaffirmation of
the conflict
their

view,

with

the Guaranty;

both

judgment

alternatively, vacated and the

below

should

be

and

the

applicable law,

favor of the 1987

Note.

reversed

In

or,

case remanded for trial regarding

the effect of the non-recourse provision.4

____________________

Guaranty

and that, under

should be resolved in
the

the

provision in

(2) was executed by the depository

institution and any person claiming
an adverse
interest thereunder,
including
the
obligor,
contemporaneously
with
the
acquisition of the asset by the
depository institution,
(3) was approved by the board of
directors
of
the
depository
institution or its loan committee,
which approval shall be reflected
in the minutes of said board or
committee, and
(4) has been, continuously, from
the time of its
execution, an
official record of the depository
institution.

12 U.S.C.
1823(e) (Supp. II 1990). We set forth the current
version, including the 1989 amendments, see Pub. L. No. 101-73,
___
103 Stat. 183, 256 (1989), as those amendments were comparatively
minor and do not impact upon the case before us.

4Appellants' alternative argument seemingly reflects the

possibility that, if the instruments are not in direct conflict,
they are at least ambiguous.
5

The yardstick
appellants' contentions
appropriate

by which we must measure

is not in

doubt.

the cogency of

"Summary

judgment is

when the record reflects 'no genuine issue as to any

material fact and . . . the moving party is

entitled to judgment

as a matter of law.'"

Rivera-Muriente v. Agosto-Alicea, 959 F.2d

_______________
_____________

349, 351 (1st Cir. 1992) (quoting

as here,
56, and

Fed. R. Civ. P. 56(c)).

When,

the district court has cranked up the machinery of Rule

disposed of a

plenary.

See
___

case on

that basis, appellate

Allen v. Adage, Inc., ___ F.2d

_____
___________

review is

___, ___ (1st Cir.

1992) [No. 91-2206, slip op. at 8]; Garside, 895 F.2d at 48.
_______
Although a
often

dispute over the

a dispute about a

meaning of a

material fact, summary

necessarily foreclosed in such a situation.

at ___ [slip op. at 6].
contract may

judgment is not

See Allen, ___ F.2d

___ _____

In some circumstances, "[t]he words of a

be so clear themselves that reasonable people could

not differ over

their meaning."

Boston Five Cents Sav. Bank v.

____________________________

Secretary of Dep't of HUD,

_________________________

768 F.2d 5, 8 (1st Cir.

is

here,

such

an

instance:

Massachusetts contract law

recourse

contract is

provision in

long-standing

compel us to

the 1987

1985).
principles

conclude that the

Note neither

This

trumps the

of

non-

plain

language of the Guaranty nor creates an ambiguity in the contract

documents.
III.
III.

ANALYSIS
ANALYSIS
We begin

apply

that law,

by reviewing applicable
explain how

result that we reach,

federal law

state law.

We then

is supportive

of the

and address appellants' remaining counter6

arguments.
A.
A.
__

The instruments at issue here state that they are to be

governed

by,

and construed

Massachusetts.
evidence
single

in

accordance

Under Massachusetts law,

a single

contract or

transaction,

they will

Indus., Inc. v. Florence,

____________
________

with,

the

when several

law

writings

comprise constituent parts

be read

together.

of

of a

See Chelsea
___ _______

260 N.E.2d 732, 735 (Mass.

1970); see
___

also Ucello v. Cosentino, 235 N.E.2d 44, 47 (Mass. 1968) (holding

____ ______
_________
that

the

parties'

construction

of the

intent
contract

"must
as a

be

gathered

whole

from

and not

by

fair

special

emphasis upon any one part"); Chase Commercial Corp. v. Owen, 588
______________________
____
N.E.2d

705, 707 (Mass. App. Ct. 1992) (construing a guaranty and

contemporaneous

loan

and security

transaction and reading them

agreements

as

part of

one

together despite the fact that

the

guaranty did not incorporate the other documents by reference).

"The question
is one of law for the

of whether a contract
judge."

term is ambiguous

Allen, ___ F.2d at ___

[slip op.

_____
at

6]; accord
______

Boston Five Cents Sav. Bank,

______________________________

Jefferson Ins. Co.

__________________
App. Ct.), rev.
____
is

723

503 N.E.2d 474,

simply

interpretation.

because litigants
See
___

476 n.4

Rather, a contract, or a

ensemble comprise

8;

(Mass.

A contract

disagree about

its

Papago Tribal Util. Auth. v. FERC,

__________________________
____

F.2d 950, 955 (D.C. Cir. 1983),

(1984).

F.2d at

denied, 506 N.E.2d 146 (Mass. 1987).

______

not ambiguous

proper

v. Holyoke,
_______

768

cert. denied, 467 U.S. 1241

_____ ______

set of documents which in the

a contract, is considered

ambiguous only when

the language "is reasonably

Fowler
______

prone to different interpretations."

v. Boise Cascade Corp., 948 F.2d

___________________

Stated another
differing,
ambiguous."

way, contract

but nonetheless

49, 54 (1st Cir. 1991).

language which "is

plausible,

Allen, ___ F.2d at

_____

susceptible to

constructions .

___ [slip op. at

Fashion House, Inc. v. K Mart Corp., 892

____________________
_____________

. .

is

12]; see also

___ ____

F.2d 1076,

1083 (1st

Cir. 1989).
B.
B.
__
Notwithstanding
overshadow the

appellants'

Guaranty by

unremitting

single-minded focus

effort
on the

1987

Note's non-recourse provision, we discern no ambiguity here.

non-recourse provision
of

unequivocally refers to

to

The

the "Obligations

Borrower," namely, Bandon, and to the "personal assets of any

________

partner."
_______

(Emphasis

obviously

supplied.)

The

status of

guarantor

is

not implicated either by the word "Borrower" or by the

allusion to "any partner."

Any

mention of, or reference to, the

appellants qua guarantors is conspicuously lacking.

___
On
plain

as

the other
a

pikestaff.

guarantee[d]"
arising."

hand, the

all

The

liabilities

Nothing in the

language of

the Guaranty

signatories
"now

"unconditionally

existing

document package

is

or

hereafter

indicates that

the

parties later intended to nullify the Guaranty or to restrict its

sweep.
reaffirm
believe

Indeed,

the parties took pains in

the Guaranty,
that,

partnership

by

thus

leaving it

executing the

obligation,

and

by
8

the 1987 Amendment to

in

Guaranty
thereafter

full flower.
in

addition to
reaffirming

We

the

it in

conjunction

with

liability in

the

loan

rewrite,

two separate and

personal

appellants

distinct capacities.

Fred T. Ley & Co. v. Sagalyn,

__________________
_______
(upholding

the

19 N.E. 2d 687,

liability

of

trustees

incurred

Cf., e.g.,
___ ____

689 (Mass. 1939)

who

also

signed

guaranty of trust obligations as individuals).

In an

effort to stem this

invite

us to infer a

clause

in the documents nugatory.

the

teeth of

reasonable
feasible.
374,

construction that would

Massachusetts law,

effect to

each

378 (Mass.

that every

(Mass. 1962).

courts to

an agreement

give

wherever

N.E. 2d

v. Monarch Life Ins. Co., 186

_______________________
"It is

a canon of

construction

word and phrase of an instrument is if possible to be

meaning, and none is

other

course

N.E.2d

441,

to be rejected

is rationally
443

appellants' reading

(Mass.

possible."

1946)

of the

(citation

absence

of

any

as surplusage if any
Tupper v.
______

manifest necessity

we cannot accept it.

Hancock, 64
_______

omitted).

documents would render

the reaffirmation of it surplusage

outcome5

invitation flies in

which directs

provision of

1986); McMahon
_______

given

utter

Such an

render an express

See J.A. Sullivan Corp. v. Commonwealth, 494

___ ____________________
____________

N.E.2d 827, 830

and

inexorable tide, appellants

Because

the Guaranty

and would do so in the

for

so

drastic

an

Moreover,

Massachusetts

law

embraces

the

maxim

____________________

5There are, of course, sound business reasons why a borrower

might want to free prospective partners from personal liability
even though existing partners remain liable as guarantors.
To
cite but one example, doing so would obviously enhance the
partnership's ability to attract new partners to the venture, and
thus, to secure an infusion of fresh capital.
9

"expressio
unius
est
exclusio
alterius."
________________________________________________

Chatham
_______

Pharmaceuticals, Inc. v. Angier Chem. Co., 196 N.E.2d 852, 854-55

_____________________
________________
(Mass. 1964).

That maxim applies as forcibly to exceptions to an

obligation as

to

contract.

See
___

enumerations
id.
___

Here, the

particular alterations in
mentioning

a nullification

assumed under the Guaranty.

failure
leaves

to provide
us no

provisions.
fiat what

choice

of the

Amendment

embraced

lists

the security instruments

or

diminution

of

the

by

a number

of

without once

liabilities

In these circumstances, the parties'

expressly for
but

objects

to

give

modification of
effect

to

the

the Guaranty

Guaranty's

Courts should not attempt to "accomplish by judicial

[a party] neglected

to achieve

contractually."

RCI
___

Northeast Servs. Div.

_____________________

v. Boston Edison Co., 822

__________________

F.2d 199,

204

(1st Cir. 1987).

To recapitulate, the

non-recourse provision limits the

liabilities incurred under the 1987 Note by the appellants acting

as
and

partners of Bandon Associates; it does not limit the separate

distinct liabilities

capacities

incurred

as guarantors.

ambiguity; the
construction.

by the

Taken

documents are

as

appellants in
whole,

there

susceptible only to

Hence, appellants'

their
is

no

one plausible

suggestion that they

intended

the non-recourse provision to qualify the Guaranty is irrelevant.

See,
___

e.g., Fairfield 274-278 Clarendon Trust v.

____ __________________________________

Dwek, ___ F.2d

____

___, ___ (1st Cir. 1992) [No. 91-1729, slip op. at 6-7] (refusing
to subrogate
contemplation

an unambiguous
of

the

contract provision to

parties;

applying

the supposed

Massachusetts

law);

10

Appalachian Power Co. v.

_______________________
(stating that a party

FPC, 529
___

F.2d

342, 348

may not "reach outside

contracts for an argument

. . .

(D.C. Cir.)

unambiguous

seeking to impart uncertainty"), cert.

_____

denied, 429 U.S. 816 (1976); Blakeley v. Pilgrim Packing Co., 340
______
________
___________________
N.E.2d 511, 514 (Mass. App. Ct. 1976) (similar).
C.
C.
__

The continued enforceability of the Guaranty, according

to

its

tenor, is

not only

dictated by

state

law and

by the

incidence of clear and unambiguous language; it is also suggested

by

the

spirit,

doctrine.6
the

As

if

not

we have

the

of

the

D'Oench, Duhme
_______________

said, appellants' basic

thesis is

that

non-recourse provision of the 1987 Note implies an intent to

defenestrate
implication

the

That

doctrine

speedily

Guaranty.

both in its
is

that

nullification

principles animating
common law and

designed to

"help

the

1989).

diminish

The doctrine
or

defeat

the D'Oench,
________

FDIC accurately

and

Bateman v. FDIC,
_______
____

1992) [No. 91-1832, slip op. at 12];

Commerce Federal Sav. Bank

__________________________

(6th Cir.

by

statutory variants.

determine an insolvent bank's value."

___ F.2d ___, ___ (1st Cir.

accord
______

We think

transgresses the

Duhme doctrine,
_____

would

letter,

the

v. FDIC, 872
____
requires that
FDIC's

F.2d 1240, 1245

agreements which

interest

acquired by it must fulfill certain requirements.

in any

asset

See supra note

___ _____

____________________

6While we agree with our concurring brother that appellants

failed to demonstrate either board or loan committee approval of
any modification of guarantor liability, we believe that the case
is satisfactorily resolved on the grounds previously discussed,

and it is, therefore, unnecessary for us to consider the further

potential ground for affirming summary judgment upon which Judge
Skinner rests his separate opinion.
11

3.

By making

requirements
important

the value of
aid the FDIC in

that

documents,

bank assets readily apparent,

fulfilling its mission.

FDIC officials,

feel they can rely,

examining the

these

"[I]t is

insolvent bank's

for valuation purposes, upon the

bank's documents as meaning what they

say."

Bateman ___ F.2d at

_______

___ [slip op. at 12].

Guaranty obligations are assets
meaning

of 12 U.S.C.

Partnership,
___________

1823(e).

909 F.2d 306, 312

Int'l, Inc., 834

___________

of the FDIC within the

See FDIC
___ ____

v. Virginia Crossings
__________________

(8th Cir. 1990);

F.2d 248, 253

(1st Cir. 1987).

non-recourse provision inserted

in the 1987 Note

Guaranty by

implication, when the

in a document separate

from the asset in

principle that

To allow

the

to nullify the

non-recourse language appears

plain words on the surface suggest a far

undercut the

FDIC v. P.L.M.
____
______

question and when

its

more limited aim, would

FDIC officials

should

be able

to

assess the value of an insolvent bank's assets from the "official

record[s]

of

the

depository

institution."

12

U.S.C.

1823(e)(4).
Appellants'
demonstrate

the parties'

many of the same

the value

should not, under the

extrinsic

evidence

ostensible intentions falls

visible to

documents to which they

of assets

they have

covertly to the diminution of these assets.

F.2d 634, 637

must

acquired,

D'Oench, Duhme rationale, be permitted

______________

v. Merchants Nat. Bank, 725

____________________

to

victim to

Such evidence, not

the face of the

determining

contribute

of

considerations.

FDIC officials on
refer in

proffer

(11th Cir.)

to

See FDIC
___ ____

(noting

12

that

the

exclude
the
cert.
_____

district

court

"correctly applied

as irrelevant any evidence

bank and

not meeting

denied, 469
______

U.S. 829

Servicing Co., 837 F.2d

_____________

Sec.

not found in

the statute's
(1984); FDIC
____

1823(e)

to

the records of

strict requirements"),

v. Cardinal Oil Well

__________________

1369, 1372 (5th Cir. 1988)

(refusing to

considerexternalevidencethat didnotmeet 1823(e)'s requirements).7

D.
D.
__
Appellants

advance

three

additional

asseverations.

None of them suffices to carry the day.

First, using prior U.C.C.
noting that

Massachusetts

Code, see Mass. Gen.

___
urge

3-119 as a springboard, and

has adopted

the

Uniform

Laws. Ann. ch. 106 (West

that, since a direct

Commercial

1990), appellants

contradiction exists between the 1987

Note and the Guaranty, the former, being a negotiable instrument,

should

be given

effect.8

The

fly

in the

ointment

is huge:

____________________

7Reliance upon extrinsic evidence is also inappropriate in

light of the longstanding common law rule that where, as here,
the contract is unambiguous, extrinsic evidence as to the meaning
of terms and the intent of the parties should not be considered.
See, e.g., Fairfield, Etc. Trust, ___ F.2d at ___ [slip op. at
___ ____ ______________________
6]; Cardinal Oil, 837 F.2d at 1371; Papago Tribal, 723 F.2d at
_____________
_____________
955; Massachusetts Mun. Wholesale Elec. Co. v. Town of Danvers,
_______________________________________
________________
577 N.E.2d 283, 289 (Mass. 1991); Blakeley, 340 N.E. 2d at 514.
________
8The language
comment 3:

that appellants most cherish

is contained in

If there is outright contradiction between [a

separate
writing
and
a
negotiable
instrument], as where the note is for $1,000
but the accompanying mortgage recites that it
is for $2,000, the note may be held to stand
on its own feet and not to be affected by the
contradiction.
U.C.C.

3-119 comment 3 (1964).

While the corresponding section

13

appellants'

exhortation

existence of

an "outright

and the Guaranty

is

completely

dependent

contradiction" between the

and we see none.

upon

the

1987 Note

To the exact contrary, there

is a perfectly natural reading which reconciles the documents and

renders

them

internally

Massachusetts demands
strain to

the

Drivers, Local 42
__________________

that we harmonize the

266,

271 (D.

reaffirmation of

reasonably

contract

the

law

Mass.

possible);

of

clauses rather than

between the non-recourse

the

Guaranty.

See
___

Truck
_____

v. International Bhd. of Teamsters, 482

_________________________________
1979) (preferring

clauses as if they are not in

is

Thus,

create an imaginary conflict

provision and

Supp.

consistent.

to

F.

read contract

conflict if such an interpretation

McMahon,
_______

is to be construed to give

186

N.E.2d

at

830

("[A]

a reasonable effect to each

of its provisions if possible.").

Next, appellants
be construed against
But,

this argument

claim that the loan

the FDIC because

is a

the lender drafted

mere heuristic.

construed against the drafter

documents should

Documents

them.

should be

only when the questioned language,

together with the circumstances surrounding its use, creates some

cognizable

uncertainty as

to intended

meaning.

See Merrimack
___ _________

Valley Nat'l Bank

_________________

v. Baird,
_____

363 N.E.2d 688,

Aldrich v. Bay State Constr. Co., 72

_______
______________________
see also
___ ____

690 (Mass.

1977);

N.E. 53, 54 (Mass.

1904);

Shea v. Bay State Gas Co., 418 N.E.2d

____
__________________

597, 602 (Mass.

____________________

of revised Article 3 (adopted after the documents at issue here

were drafted) does not retain this comment, see U.C.C.
3-117
___
(1990), the prior version still persists in the Commonwealth.
See Mass. Gen. Laws Ann. ch. 106,
3-119.
___
14

1981) (stating that the rule of construction against the

"must give

way to the

primary and

drafter

inflexible rule that

. .

contracts . . . are to be construed so as to ascertain . .

true

intention

of the

parties")

(citation omitted).

. the

In the

absence of ambiguity, non-drafters gain no special advantage.

Appellants' last argument completely
original premise.
Note and

Having unsuccessfully maintained that the 1987

the Guaranty

are irreconcilably inconsistent

____________

another, they shift gears in

the

first

time,

contradicts their

that

the

with one

their reply brief, maintaining, for

two

documents

are

unnecessarily

duplicative (in

other words, consistent

__________

with one another).

this end, they cite Seronick v. Levy, 527 N.E.2d 746, 749
________
____
App.

Ct.), rev.
____

broadcast
as

N.E.2d 797

(Mass. 1988),

(Mass.

for the

proposition that, where the makers of a note also sign

guarantors,

unenforceable.
the

denied, 530
______

To

the

guaranty

is

surplusage

Because appellants signed both

and,

hence,

the 1987 Note and

Guaranty, they argue, the Guaranty is excess baggage and the

FDIC cannot proceed against them under it.

The

facts

of

overgeneralized argument.
appellants individually
the

this

Because

assets

Guaranty

is

of

hardly

fail

to

support

partners

1987 Note blocks

other than

surplusage.

such

an

the Guaranty operates to hold

responsible for Bandon's

mortgage lender while the

personal

case

the

Moreover,

liabilities to

recourse to the
appellants,
the

Guaranty

the

is

15

significantly broader

than the

1987 Note in

certain respects.9

We offer

two examples.

(1)

The Guaranty does not

refer to the

repayment of any specific liability in any specific

time period,

but rather was clearly meant to secure any liability running from
___
Bandon

to

the

undertaken
1987

or any

such time

insecure."
Guaranty

specific note,

or times as

is not

the

obligation

bounded by the term of the

for that

the [lender]

matter.

(2) The

surplusage by

personal assets,

may deem

dissimilarities adequately
any stretch

itself to be

evince
of the

that

the

most active

Cf. Ligran, Inc. v. Medlawtel, Inc., 432 A.2d 502,

___ ____________
_______________

(N.J. 1981) (holding

surplusage

way,

collateral, presumably from

These

imagination.
505-06

another

unlike the 1987 Note, also obligates the guarantors to

deliver additional
"at

Stated

under the Guaranty is not

Note

Guaranty,

bank.

when a

maker

that although

also signs

as

a guaranty

is often

guarantor, in

certain

limited and unusual situations, a maker may enlarge the scope, if

not the duration, of liability by signing as a guarantor).10
____________________

9In other respects, however, the Guaranty is slightly

narrower than the 1987 Note. For example, the Guaranty, unlike
the 1987 Note, specifically contemplates possible revocation by
one or more of the guarantors.

10To be sure, certain states have laws that prohibit or

limit deficiency judgments after foreclosure.
To enforce the
policies behind these statutes, courts have frowned on postforeclosure deficiency judgments against guarantors who were also
makers. See, e.g., Westinghouse Credit Corp. v. Barton, 789 F.
___ ____
_________________________
______
Supp. 1043, 1046 (C.D.Cal. 1992) (non-recourse nature of loan to
partnership did not separate guarantor from his normal status as
partner and principal obligor so as to make him a true guarantor
outside the protection of California anti-deficiency law); First
_____
Interstate Bank v. Larson, 475 N.W.2d 538, 542-44 (N.D. 1991)
_______________
______

(distinction between obligors' joint liability as partners and

their joint and several liability as individual guarantors must
16

IV.
IV.

CONCLUSION
CONCLUSION
We

is

need go no further.

commercial,

counsel,

the

and the

Where, as here, a "transaction

principals

practiced

contract itself

and

represented

reasonably clear,

it

by

is far

wiser for a court to honor the parties' words than to imply other
and further promises out of thin air."

Mathewson Corp. v. Allied

_______________
______

Marine Indus., Inc., 827 F.2d 850, 856 (1st Cir. 1987) (applying
____________________
Massachusetts law).
we should

On

not venture

agreements

that

satisfied

that,

unambiguous.

that basis, we are fully

to rewrite

underlie
as

this

written,

the lender/borrower/guarantor
controversy.

the

Construed according

agreements

We
are

to their tenor,

summary judgment in the FDIC's favor.

Affirmed.
Affirmed.
________

satisfied that

are

equally

clear

and

they warrant

Concurrence Follows

____________________

give way to the force of North Dakota's anti-deficiency law).

Massachusetts, however, has no such policy. See Mass. Gen. Laws
___
Ann. ch. 244, 17B (West 1988). Accordingly, we are particularly
reluctant to strip a bona fide guaranty of its intended effect.
17

SKINNER, District Judge, concurring.

I concur in the
because I am unable
is in fact no
In

my

view

evidentiary

court's judgment, but write separately

to accept the court's conclusion

conflict between the 1987 Note

this

issue

hearing.

should

The result

not

be

and the Guarantee.

resolved

adopted by

that there

without

the court

an

can be

reached by a different route, however.

Congress

opted

for

certainty

when

it

enacted

the

categorical recording scheme

FDIC, 484 U.S.
____
into

embodied in

86, 95 (1987).

the enforceability

of

1823(e).

The scope

Langley v.
__________

of a court's

an agreement

is

inquiry

limited, and

the

court's conclusion depends entirely on the agreement's compliance

or

noncompliance

statute
defeat

with the

provides that any

the

interest of

statute.

See
___

id. at
__

agreement that "tends

the [FDIC]

in

94-95.

The

to diminish or

any asset

acquired" as

receiver is invalid against the FDIC, unless the agreement:

(1) is in writing, (2) was executed by the depository
institution and any person claiming an adverse interest
thereunder, including the obligor, contemporaneously
with the acquisition of the asset by the depository
institution, (3) was approved by the board of directors
of the depository institution or its loan committee,
which approval shall be reflected in the minutes of
said
board
or
committee,
and (4)
has
been,
continuously, from the time of its execution, an
official record of the depository institution.
12 U.S.C.A.
In

1823(e).

this case,

1985 Guaranty
1823(e).

the district court

concluded correctly

that the

was an "asset" of the FDIC within the meaning of

FDIC v. Virginia Crossings Partnership, 909 F.2d 306,

_______________________________________

312 (8th Cir. 1990); FDIC v. P.L.M. Int'l, 834 F.2d 248, 253 (1st
____________________
Cir.

1987).

Therefore,

in

order
18

to

defeat

or

impair

the

Guaranty, the appellants had the burden of demonstrating that the

1987 Agreement
four

and purported release

requirements of

1823(e).

complied with each

of the

FDIC v. Rivera-Arroyo, 907 F.2d

_____________________

1233, 1236 (1st Cir. 1990); P.L.M. 834 F.2d at 253.

_____
The
board

statute, among

or loan

approval

other

committee

approve the

be reflected in the

meeting.

12

approval,

the

U.S.C.

things, requires

minutes of the

1823(e)(3).

agreement

agreement

is

(W.D.

Tex.

unenforceable

in spite

minutes

do not

Gardner,
_______

606

agreement

1985)
of

F.

not

Supp.

1484,

referenced

1488
or

such

against

of
the

such

FDIC.

F. Supp. 1027,

subordination

general board

specifically approve

and that

Absent evidence

unenforceable

(holding

the

board or committee

P.L.M., 834 F.2d at 253; FDIC v. Eagle Prop., 664

_____
__________________
1051

both that

certificate

authorization because

the certificate);
(S.D.

Miss.

affirmatively

FDIC v.
_______

1985)
and

(side

directly

acknowledged is unenforceable).
The

record

is devoid

of

evidence

supporting appellants'

contention that the board or loan committee approved a release or

modification

of the

guarantors' liability.

appellants conceded that they

At

could point to no document

affidavit to demonstrate the requisite approval.

is

not

silent on

oral argument,

this issue.

purported release, both the Loan

Indeed,

But

far from

and no

the record

reflecting a

Committee Minutes and the

Loan

Approval
they

Sheet indicate

refer to the four

the new

Note.

precisely

the opposite

appellants, by name,

Moreover,

the

record

understanding:

as "guarantors" of

demonstrates

that

the

continuing personal guaranties of the appellants were significant

factors

in approving the loan.

A risk analysis report, attached

19

to

the loan approval sheet, twice mentions the "strength" of the

appellants' personal

guaranties as mitigating risk

factors.

It

is clear that no release of personal liability was authorized.

There is no genuine
entitled

to judgment as

issue of material fact and

a matter of

law.

affirming the judgment of the district court.

the FDIC is

therefore join in

20